Re: Electronic Banking

[ghsvax!hal@uunet.UU.NET (Hal Finney)]

Eric Hughes points out that the blind signatures used to provide
anonymity in Chaum's digital cash schemes are patented (by Chaum
himself).  This is a problem for an official, legal, profit-making
business which wants to engage in electronic banking.

However, such a business would face many other problems.  Chaum's
digital cash system could be construed as using the RSA algorithms,
since it is in effect an RSA signature which makes the cash
unforgeable.  So a license for RSA would have to be obtained as well.
(RSA licensing would also be needed for secure communication between
the bank and its customers.)

In addition, the acceptable use policies of NSFNET, which would
probably have to be involved in most communications with the bank,
are inconsistent with this kind of commercial activity, from what I
understand.  I believe new policies are in the works to allow
commercial activities on the net, but these again will involve
licensing costs.

There is also the question of the legality of private cash in any
form, electronic or otherwise.  Nobody seems to have hard evidence on
this.  On the one hand, people can legally exchange certain types of
securities, and they could perform services for each other in return
for such exchanges.  This is legal, but they are supposed to report
the income on their tax returns.  Our digital cash would seem to fit
this model.  (But are such securities transfers as untraceable as
digital cash?  Perhaps not.)

On the other hand, I read several years ago that casino chips in Las
Vegas were starting to be used as cash substitutes, but that the
government cracked down on this practice.  Perhaps this was too
conducive to money laundering, especially with the reputed underworld
activity in that city.

I do think, though, that an informal digital cash system, presented as
a research project or an educational game, would be able to slip
between the cracks of the legal system, much as PGP has done.  And I
think this presentation would be legitimate.  Digital cash is new
(actually, nonexistant, as far as I know), and any use of it would by
its very nature be research and be educational.

I would suggest that anyone who proposes to implement such a game
might want to consider releasing it anonymously (actually,
pseudonymously).  Sign the release with a PGP or RIPEM key, and let
that be your pseudonym.  Let people post messages to alt.security.pgp
or some other newsgroup to discuss it, so that you can read them
without revealing yourself, as proposed by Yanek.  Post your replies
anonymously using our remailers.

This way there won't be a single-point target for anyone wishing to
punish users of the game.

Hal
74076.1041@compuserve.com